ICD-10 Training Camp: Chapter 16 – Certain Conditions Originating in the Perinatal Period (P00-P96)

Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT November 30th, 2011

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ICD-10-CM codes begin with a letter and are followed by up to five numbers or alpha characters.  All letters of the alphabet are used (except U), and valid codes can contain three, four, five, or six characters, with some chapters requiring a 7th character extension.   The ICD is used to translate diagnoses of diseases and other health problems from words into an alphanumeric code, which permits easy storage, retrieval and analysis of the data. 

The ICD classification is designed to promote international comparability in the collection, processing, and presentation of mortality and morbidity statistics, as well as reimbursement based on medical necessity.  It is used to classify diseases and other health problems recorded on many types of health and vital records, including death certificates and patient records. The reported conditions are then translated into medical codes in accordance with the classification structure and the selection and modification rules contained in the applicable revision of the ICD-10 Official Guidelines.

Codes that can last a lifetime!

ICD-10-CM organizes diagnosis codes for newborns in Chapter 16 “blocks”:

  • P00-P04 Newborn affected by maternal factors and by complications of pregnancy, labor, and delivery;
  • P05-P08 Disorders related to length of gestation and fetal growth; 
  • P09 Abnormal findings on neonatal screening;
  • P10-P15 Birth trauma;
  • P19-P29 Respiratory and cardiovascular disorders specific to the perinatal period;
  • P35-P39 Infections specific to the perinatal period;
  • P50-P61 Hemorrhagic and hematological disorders of newborn;
  • P70-P74 Transitory endocrine and metabolic disorders specific to newborn;
  • P76-P78 Digestive system disorders of newborn;
  • P80-P83 Conditions involving the integument and temperature regulation of newborn; 
  • P84 Other problems with newborn; and,
  • P90-P96 Other disorders originating in the perinatal period.

The perinatal period describes conditions that have their origin in the time immediately before birth (depending on definitions, this could be between the 20th to 28th week of gestation), through the first 28 days after birth.  Codes in this chapter are never used on the mother’s record.  Perinatal conditions may exist throughout the life of the patient, and chapter 16 codes may be assigned if the condition is still present. 

The birth episode of care for the newborn is assigned a code from category Z38, Liveborn according to place of birth and type of delivery.  Z38 is the first listed code, and assigned only once, to a newborn at the time of birth.  Category Z38 is only used on the newborn chart, never the mother’s record.  Example, Z38.30 describes twin liveborn infant, delivered vaginally.  All clinically significant conditions noted on a routine newborn examination should be coded.  If the reason for the encounter is a perinatal condition, the code from chapter 16 should be sequenced first.

There are many instances where a newborn is observed for a suspected condition, but after study that condition is ruled out.  ICD-10 chapter 16, code block P00-P04, has codes for use for newborns suspected of having an abnormality resulting from exposure from the mother or the birth process but without signs or symptoms, and, after examination and observation, is found not to exist.  Example, code P04.41 Newborn (suspected to be) affected by maternal use of cocaine, or code P00.0 Newborn (suspected to be) affected by maternal hypertensive disorders.

Prematurity and Fetal Growth Retardation

Prematurity and Fetal Growth Retardation (P05-P08) describe newborn gestational age and weight disorders.  Providers utilize different criteria in determining prematurity.  A code for prematurity should not be assigned unless it is documented.  Assignment of codes in categories P05, Disorders of newborn related to slow fetal growth and fetal malnutrition, and P07, Disorders of newborn related to short gestation and low birth weight, not elsewhere classified, should be based on the recorded birth weight and estimated gestational age.  Codes from category P05 should not be assigned with codes from category P07.  When both birth weight and gestational age are available, two codes from category P07 should be assigned, with the code for birth weight sequenced before the code for gestational age.  Example, P05.12 (Newborn small for gestational age, 500-749 grams), and code P07.22 (Extreme immaturity of newborn, 24-26 completed weeks).

Other conditions described in chapter 16 include:

  • birth injuries,
  • aspiration conditions,
  • respiratory conditions,
  • infections and
  • endocrine disorders. 

Feeding problems are described in category P92, and include vomiting, slow feeding, underfeeding, fast feeding, and difficulty in feeding at breast.

The majority of diagnosis codes listed in chapter 16 have 4 or 5 digits; there are no 7th character requirements in this chapter.  Documentation must support all code assignments and sequencing of first-listed and secondary conditions must be accurate.

Diagnosis codes are to be used and reported at their highest number of digits available.  ICD-10-CM diagnosis codes are composed of codes with 3, 4, 5, 6 or 7 digits.  Codes with three digits are included in ICD-10-CM as the heading of a category of codes that may be further subdivided by the use of fourth and/or fifth digits, which provide greater detail. A three-digit code is to be used only if it is not further subdivided.    A code is invalid if it has not been coded to the full number of characters required for that code, including the 7th character, if applicable.  The coder must pay attention to chapter instructions and follow the official guidelines as well.  The draft manual of ICD-10 contains official guidelines and chapter highlights.

Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT, author of The Nancy Maguire GPS to ICD-10-CM Planning and Implementation Guide, is a nationally-renowned procedural and diagnostic coding instructorNancy Maguire, ACS, PCS, FCS, HCS-D, CRT, author of The Nancy Maguire GPS to ICD-10-CM Planning and Implementation Guide, is a nationally-renowned procedural and diagnostic coding instructor, bootcamp trainer, and workshop leader. She has spent more than 30 years as a hands-on coder and has authored countless coding articles and presentations. In her expansive career, she has transitioned from nursing, to coding, to practice management, auditing and consulting. Nancy served as Director of Coding and Reimbursement at UTMB in Galveston Texas for four years. She served the first two terms as president of AAPC in the early 1990s.

Hear Nancy speak in two complimentary archived webinars on ICD-10 presented by Kareo medical billing software: How to Prepare for ICD-10/5010 to Reduce F41.1 (Anxiety Reaction) or Preparing for ICD-10-CM: The Nitty-Gritty of Diagnosis Coding. You can also read her entire series of articles on ICD-10.


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Small Business Lessons for Physician Practices – Part 3 of 4 : Financial Basics

Laurie Morgan November 28th, 2011

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Laurie Morgan advises key points to watch in the financial management of a medical practice

You know that old saying, “Take care of the pennies and the dollars will take care of themselves”?  That expression has a lot of relevance for small businesses – and perhaps especially for medical practices.  That’s because variances that seem small individually add up to a lot of money when the variance occurs repeatedly – and, in the financial management of a medical practice, the same types of transactions occur over and over again.  Being diligent about capturing those pennies can make all the difference to practice profitability over the course of a year.

In our consulting work, when we take our first look at a practice’s financial management discipline – i.e., that attention to pennies – our top-level assessment includes three main areas:

  • How much of what the practice earns is it receiving?
  • How much of what the practice receives is it keeping?
  • How productively does the practice invest its financial resources?

Receive what you’ve earned

Too often, small businesses are concerned primarily with what they’re charging and give too little attention to what they actually collect.  They bill customers who would have willingly paid with a credit card instead. And they assume – incorrectly – that uncollected amounts will be small, and that small differences in collections versus charges have little impact on profitability. 

Unfortunately, this goes double for medical practices – and has only gotten worse with changes in insurance programs that have made collecting full payment more challenging.

Here on Kareo.com, there are many helpful articles about improving your collection process, including this one by my colleague Judy Capko.  Besides all these excellent tips for refining (or even revamping) your processes to improve collections, it’s also important to develop an unapologetic financial mindset. 

What do I mean by this?  Too often, practice managers and physicians are too quick to waive co-pays or reduce charges when faced with the difficult prospect of confronting a patient and asking for money.  Usually, this is rationalized by the “trivial” individual amount.  The problem is, these “trivial” amounts quickly become non-trivial when multiplied over dozens of instances.  Waiving one $20 co-pay is insignificant alone; doing the same thing twice a day adds up to $10,000 in a year – multiply that by several physicians in a practice, and you’ve lost a decidedly non-trivial sum of money.

The same bias can apply in billing and coding.  Under-coding to “avoid hassles” may seem like it saves time – but losing $20 or $30 per visit adds up to thousands of dollars when under-coding happens several times a day.  Don’t shave a “small difference” off what you’re paid without considering the multiplicative effects.

Keep what you receive

Pennies count on the expense side, too.  Just as with practice revenues, seemingly small differences make a huge difference in profitability when they occur repeatedly.

One example: credit card fees.  As co-pays and co-insurance have increased in importance, so have credit card transactions.  The transaction fees charged by your credit card processor can add up to thousands of dollars per year.  Saving just a few pennies on each transaction can add hundreds or even thousands of dollars to practice profitability at the end of the year.  It costs nothing out-of-pocket to research and renegotiate – and the savings you receive go 100% to profitability!

Dozens of items a practice requires have this multiplicative effect.  Monthly bills like phone service, internet service, energy and postage are all opportunities for small monthly savings that accumulate to significant amounts over the long run.

Becoming aware of small variances is a discipline – and it pays off in many ways as you develop it.  Small changes in appointment bookings, for example – a one-time variance or a trend to be checked out?  Being aware of small differences also makes it less likely that your practice will experience embezzlement, since internal theft almost always starts small.

Invest productively

Small variance discipline also applies to your spending – or, rather, your investment – on operating expenses.

For example, are you spending too much or too little on staffing?  Having competitive compensation is essential for retaining staff – and avoiding the costs of recruiting and training replacements.  But, spending even a few percentage points more than you need to on weekly payroll adds up to a huge variance by the end of a year.  Compensation data – e.g., from local or national surveys – can be a big help in developing a salary matrix for your staff. 

Staffing is almost always the single biggest expense for a medical practice, so it’s also crucial to be sure you’re benefitting as much as possible from their efforts.  Is staff time being used on tasks that could be more cost-effectively outsourced?  Are staff members spinning their wheels on low-payoff tasks like collections?  Could they be reassigned to projects or duties that could bring more value to the practice?  Have new technologies rendered some of their routine tasks obsolete?

Analyze your staff’s duties regularly – at least annually – to ensure they’re still generating the most value for your practice.  This provides a great opportunity to get input from staff about how to improve operations, too.

Small variance discipline applies to your investments in technology, too.  Sometimes, we see practices move slowly to replace antiquated technologies – whether a phone system, PCs, billing or EHR. The delay is often justified by avoiding a significant cash outlay, especially when the immediate savings in return are “small.”  But often those small savings add up to a profitable investment in less than a year – and, investing in productivity tools usually frees up more staff time that can be profitably reinvested as well.  Often there are even energy savings that should be considered. Don’t forget to consider all the savings that could accrue from a technology investment before rejecting it to “be frugal” in the near term.  Pennies saved add up fast!

Small Business Lessons for Physician Practices is a four-part series.  Next installment: Operating efficiently. Read the previous installments on Getting Started with Marketing and Human Resources now.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at www.capko.com/blog . Laurie has a BA in Economics from Brown University and an MBA from Stanford.

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Managing Your Medical Billing Team – Getting the Performance You Expect, Part 1: The Performance Management Process

Kathy McCoy, MBA November 22nd, 2011

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Sara Larch, MSHA, FACMPE, discusses how to get the performance you expect from your medical billing team

If you are seeing less than stellar results from the efforts of your medical billing team, or would like to take your results to the next level, perhaps it’s time to take a hard look at ways to improve your team’s performance. In a new webinar presented by Kareo, practice management expert and author Sara M. Larch, MSHA, FACMPE, delivered an information-packed presentation that focused on getting the performance you expect from your medical billing team. Kareo often features educational webinars on practice management challenges that impact your bottom line. In a series of blogs beginning with this one, we will summarize the salient points from Sara’s excellent webinar to help you “up the game” of your medical billing team.

First and foremost, Sara advises taking a hard look at your performance management process. It really is the foundation that sets the groundwork for your success. Performance management is on ongoing cycle that should start with an accurate job description. Sara gave an excellent resource for sample job descriptions that you can access via the recorded webinar. Once there is a clear understanding on the parameters of the job, set performance standards and communicate your expectations. For instance, one expectation may be that all employees can read and understand a patient’s insurance card. Another may focus on the process for posting payments in a uniform manner, depending on the insurance. Regular audits should be performed to determine an employee’s compliance, with a summary score that lets each one know how well they are meeting performance standards.

In terms of overall performance reviews, Sara notes that best practices suggest a formal review every six months—but they should at least be conducted annually.  If you are performing min-performance audits every quarter or so, the assessment on the annual review should be no surprise to your employees. Sara’s presentation also included a list of tips for conducting an effective formal review.

Finally, Sara notes that many offices may include three or four generations within the same workforce: Veterans, Baby Boomers, Gen Exers and Millenials. This simple fact increases the complexity of the workforce because each generation holds different values, expectations for job satisfaction, motivating factors and more. Sara recommends that you accept the fact that the value systems of your employees may be different from yours. But with a shared understanding of what is important to you – and a structure in place to ensure they can meet those expectations – you can significantly enhance the performance of your medical billing team.

Sign up now to be put on our notification list for upcoming informative webinars such as this one. You can also view our archived webinars to find more topics of interest to you. If you would like to learn more about Kareo’s innovative tools for streamlining your medical billing and collections, watch a demo of our medical billing software.

Sara Larch, MSHA, FACMPE, is a speaker and consultant in practice operations and revenue cycle management and co-author of “The Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid.” She contributed an article on “Strategies for Successful Denial Follow-up in Medical Billing” in our June Getting Paid newsletter, and an article on Preparing For 2012:  What Needs to Happen When?  Create Your Calendar Now” in our October Getting Paid newsletter.

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What You Need to Know About Annual Wellness Visits for Medicare Patients

Betsy Nicoletti, M.S., CPC November 21st, 2011

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Annual Wellness Visits are little used by seniors, perhaps because few physicians provide it, according to the Bend Bulletin

Many primary care practices wanted to avoid providing the Welcome to Medicare Visit and the Annual Wellness Visits.  The visits don’t correspond to what most physicians consider as an annual physical exam, as described by preventive medicine codes 99381—99397.  In fact, although Medicare’s booklet, “Medicare and You” tells Medicare beneficiaries they are eligible for an “exam” each year, neither of these visits has much of an exam component required.   Although groups have resisted them, patients expect them.

The Welcome to Medicare Visit, or Initial Preventive Physical Exam (IPPE) was a gift of the Medicare Modernization Act of 2004.  Newly enrolled Medicare beneficiaries are eligible for this once-in-a-lifetime benefit during the first twelve months they are enrolled in Medicare.  The Welcome to Medicare visit (code G0402) requires:

  • Taking the patient’s medical, social and family history, including the use of vitamins and supplements
  • Review of individual’s potential for depression using an industry standard screening tool
  • Review of the patient’s functional ability and level of safety, using a standard tool
  • Physical exam to include height, weight,  BMI calculation, blood pressure, and visual acuity
  • Performance and interpretation of an EKG—optional (Use code G0403 for the screening EKG, not 93000)
  • With patient permission, end of life planning
  • Education, counseling and referral, as appropriate, based on the results of the first five elements
  • Education, counseling, and referral including a brief written plan given to the patient (such as a checklist) recommending the appropriate screening and other preventive services covered by Medicare.
  • Any diagnosis is acceptable for codes G0402 or G0403.

The Initial and Subsequent Annual Wellness Visits (AWV)  were Healthcare Reform Act mandates, and the benefit became effective January 1, 2011.  Starting in 2012, these visits must include a Health Risk Assessment, completed before or as part of the AWV.   Patients are eligible for the initial AWV if they have been enrolled in Medicare for over a year, and they have not received an IPPE or AWV in the past year.  A patient may receive a subsequent AWV one year after the initial AWV.  The requirements for an Initial Annual Wellness Visit (G0438) are:

  • Reviewing the patient’s self-administered Health Risk Assessment
  • Taking or updating individual’s medical and family history
  • Establishing a list of current providers and suppliers of medical care
  • Height, weight, BMI calculation (or waist circumference), BP and “other routine measurements as deemed appropriate”
  • Detection of any cognitive impairment that the individual may have by direct observation, with consideration of information from medical records, patient reports, or concerns raised by family members
  • Review potential for depression based on use of appropriate screening instrument
  • Review of individual’s functional ability and level of safety based on direct observation, or use of screening questionnaire
  • Establishment of a written screening schedule, such as a checklist, for the next 5-10 years based on the recommendations of the US Preventive Task Force and Advisory Committee on Immunization Practices, and the individual’s health status, screening history, and age-appropriate covered Medicare services
  • Development of a list of risk factors and conditions for which primary, secondary or tertiary interventions are recommended or are underway, including mental health conditions or risk factors or conditions identified through an previously performed Welcome to Medicare Visit (or this visit) and a list of treatment options and their associated risks and benefits
  • Furnishing of personalized health advice and referral, as appropriate to health education or preventive counseling programs aimed at reducing identified risk and improving self management including weight loss, smoking cessation, fall prevention and nutrition.

Looking at the list of requirements, it is no wonder practices are reluctant to perform it!  However, the primary care specialty societies have developed templates for their members’ use, which has simplified the process. Links: AAFP, ACP (Editor’s Note: Requires password, but if you cancel, you’ll get the form).

The subsequent AWV (G0439) requires updates to the same components as in the initial exam. Because the bulk of the work was done at the initial visit, the subsequent visit is less time consuming.

A few other key points: these visits are not defined as new or established.  There is no co-payment or deductible for the AWV.  The deductible applies to the IPPE, but not co-insurance.  A physician practice will need to check with their Medicare Advantage plans to see if they cover preventive medicine services as defined by CPT or these visits.  In addition to the AWV, a practice may bill for a pelvic and breast exam G0101.  A problem-oriented visit may also be billed on the same day; however, CMS tells us that no part of the documentation used for the AWV may be used in determining the level of service for the  office visit.

AWV chart from CMS can be downloaded from the CMS site.

Betsy Nicoletti, M.S., CPC, is the founder of Codapedia.com, a wiki for physician reimbursement. She is a nationally known speaker and consultant, and can be reached at www.mpconsulting.org. You can watch an informational video by Betsy Nicoletti on Better Collections Through Improved Medical Coding now. Or, view her archived webinar on What You Can Do to Prepare for Medicare Payment Reductions. She has also written recently on Why Can’t We Get Paid? A Look at Denials.

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Medical Billing Update: CMS Announces Version 5010, D.0 and 3.0 Standard Enforcement Discretion Period

Kathy McCoy, MBA November 17th, 2011

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CMS announces no enforcement action on 5010 until March 31, 2012

This announcement was just posted on the CMS website, providing some relief for those worried about 5010:

The Centers for Medicare & Medicaid Services’ Office of E-Health Standards and Services (OESS), has announced that it would not initiate enforcement action with respect to any HIPAA covered entity non-compliant with the ASC X12 Version 5010 (Version 5010), NCPDP Telecom D.0 (NCPDP D.0) and NCPDP Medicaid Subrogation 3.0 (NCPDP 3.0) standards until 90 days after their January 1, 2012 compliance date, or until March 31, 2012. The compliance date for implementation of these updated standards remains January 1, 2012. More information, view the complete statement and enforcement FAQs.

In the meantime, we recommend that Kareo customers read our latest blog on 5010 and what you should do to be ready.

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Medical Billing Update: Further Reduction in Reimbursement Proposed for Imaging

Bhagwan Satiani, MD, MBA, FACS, FACHE November 16th, 2011

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Professional reimbursement for imaging is paid through Part B of Medicare.  Medicare non-invasive diagnostic imaging per 100 beneficiaries has increased from 1000 to 1200 for in-patients, 800 to 1000 for hospital out-patients and from 200 to 400 for private offices comparing 1996 and 2006 volumes. (1)  A 2008 report from the General Accountability Office (GAO) stated that Medicare spent over $14 billion on imaging services in 2006 – a two-fold increase from 2000. (2)

Starting with the Deficit Reduction ACT (DRA) in 2006, CMS began cutting reimbursement for imaging services. The new 2012 Hospital Outpatient Prospective Payment System (HOPPS) Proposed Rules continue this trend.

Here are the latest proposals, which will further reduce reimbursement by Medicare for imaging. These steps, if enacted, will have a big impact on those practices that rely on imaging revenue in Medicare patients. (3)

1. Multiple Procedure Payment Reduction Expansion to Professional Payments. Having applied this to the technical portion, CMS now expands the reduction to professional services for imaging examinations. If private carriers also follow the Medicare example, the decline in revenue could be significant.

2.  CMS is in the process of transitioning to a new practice expense portion of the RVU. Although some imaging procedures may not be affected, others could be cut significantly in 2012 and 2013.

3. Abdomen and Pelvis CT Standalone Codes may undergo reductions in reimbursement. The American Medical Association committee on CPT codes (Relative Value Scale Update Committee) has recommended three abdomen and pelvis bundled CPT codes (74176, 74177, and 74178) in 2011 and this will likely be accepted by CMS. Again, this may result in reduction in reimbursement. Prior to 2011, these services were billed using multiple standalone codes for each body region with and without contrast.

As an example, (3)

Bhagwan Satiani, MD, MBA,  FACS, FACHE examines further reductions in professional reimbursement for imaging

Source: 2012 Medicare Physician Fee Schedule Proposed Rule, Centers for Medicare and Medicaid Services, July 2011, available at: www.cms.gov and 2012 Hospital Outpatient Prospective Payment System Proposed Rule, Centers for Medicare and Medicaid Services, July 2011, available at: www.cms.gov; (3)

CMS has also proposed relative weights and payment rates for its APC (Ambulatory Payment Classification) procedure codes.

For example, major cuts in PET and vascular imaging are proposed.

Bhagwan Satiani, MD, MBA,  FACS, FACHE, discusses proposed major cuts in PET and vascular imaging reimbursement Source:  2012 Medicare Physician Fee Schedule Proposed Rule, Centers for Medicare and Medicaid Services, July 2011, available at: www.cms.gov and 2012 Hospital Outpatient Prospective Payment System Proposed Rule, Centers for Medicare and Medicaid Services, July 2011, available at: www.cms.gov; (3)

There is more to come. CMS and the Patient Protection and Affordable Care Act (PPACA) are going to lower technical payments (TP) for non-hospital providers through 2013. These changes include

1. An increase to the equipment utilization factor for CT and MRI (resulting in a decrease in reimbursement rates) equipment utilization rate for expensive diagnostic equipment to be set at 75 percent. The utilization rate is critical because it is used to calculate the practice expense part of the Relative Value Unit in the technical component of the payment. Previous to this change, the utilization assumption for MRI and CT was set at 50 percent. (3)

2. Expansion of the multiple procedure payment reduction policy to more non-surgical services. CMS recently increased the multiple procedure payment reduction for the TC of imaging procedures from 25 percent to 50 percent in 2010 as mandated by PPACA. Previous to this change, CMS policy had reduced the TC payment by 25 percent for the second and subsequent imaging procedures performed on the same patient on contiguous body parts within 11 families of codes. (3) CMS plans to not only further reduce it to 50 percent but to expand the services subject to the reduction to include the second and subsequent procedures for all CT and CTA, MRI and MRA, and ultrasound services regardless of modality or body part.

3. Additional disclosure requirements are being phased in for in-office ancillary services exception to the prohibition on physician self-referral for some imaging services. (3)The Stark legislation prohibits self-referrals by physicians to facilities in which they have ownership. Later, a series of common sense ‘exceptions’ were granted to allow for legitimate business transactions including the ‘in-office’ ancillary services exception. This exception allows rapid diagnosis and initiation of treatment during the patients office visit resulting inpatient convenience and better coordination of care. However, imaging must be personally supervised by the referring physician, a physician who is a member of the group practice, or an individual who is supervised by the referring physician or another physician in the group (the supervision requirement). There are also specific building/billing requirements in place by Medicare. Now, CMS is proposing that physicians who perform MRI, CT and PET services in their offices relying on this exception to Stark disclose certain information to patients. Patients must be notified in writing at the time of referral that they have the right to receive these services from an entity other than the physician or his/her group practice and practices must also provide a list of alternative “suppliers” in the area. With some exceptions, the list of alternative suppliers would have to include 10 alternative suppliers within 25 miles of the physician’s office at the time of the referral. The documentation required for audit purposes must include the patient’s signature and the record must be placed in the patient’s chart.

Conclusion: Because of the vast amount of money spent on diagnostic imaging services, Congress will aggressively look at the big ticket items such as PET scans and MRI and CT tests first to reduce reimbursement. Later, cheaper ultrasound imaging services will be put under the microscope.


1. Hamby L. Beyond the current crisis | Investments in quality, safety should be spared budgetary knife. Modern Healthcare 39 (5) Feb 2, 2009(p9).

2. GAO Report “Medicare Part B Services. Rapid spending growth and shift to physician offices indicate need for CMS to consider additional management practices.” June 2008. Available at http://www.gao.gov/new.items/d08452.pdf, accessed 9/22/2011.)

3. The Advisory Board Company. Imaging Payment Update for 2012. www.advisory.com

Bhagwan Satiani, MD, MBA,  FACS, FACHE, is President of Savvy-Medicine (www.savvy-medicine.com), a business education consulting organization and Professor of Clinical Surgery, Division of Vascular Diseases & Surgery, Department of Surgery, The Ohio State University College of Medicine, Columbus. He is the author of the 3-volume set “The Smarter Physician” published by MGMA and co-author of “The Coming Shortage of Surgeons: Why They Are Disappearing and What We Can Do About It.” He has also written for Getting Paid on Benchmarks for Your Medical Practice: A Vital Part of Critical Practice Analysis and Understanding the RVU in Practice Management: Getting the Most Out of Using It in Your Practice.

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Small Business Lessons for Physician Practices – Part 2 of 4: Getting Started With Marketing

Laurie Morgan November 14th, 2011

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Marketing is an intimidating subject for many physician practice owners and office managers.  If you’re not sure whether or how you should market your practice, or whether the marketing you’re already doing does more harm than good, you’re not alone.  Small business owners and managers of all stripes often find marketing a source of anxiety.  Those fears about not being able to get it “right,” wasting money or even damaging your reputation with bad marketing can lead people to opt out of marketing altogether – perhaps the worst thing you can do.

Intentionally or not, you’re already marketing your practice

One of the things we tell our clients is that even if you believe you’ve opted out of marketing, every patient interaction – whether with a physician, a staff member, your phone system or website – contributes to the patient’s experiences and impressions of your practice.  What’s more, today’s patients are more empowered than ever to share their opinions about those experiences – amplifying what they perceive as positives or negatives about your practice.

So, what happens when you’ve paid no attention at all to marketing?  Patients today have many choices, and often mistake the quality of their interactions with your practice as a whole for quality of medical care.  When patients come to your practice and there is no sense of identity (no common logo or color scheme), when they look for your website online and it doesn’t exist or appears to be fallow, when they search for you in a directory and find a disconnected phone number, when patients call your practice and aren’t handled in a consistent way – these are not neutral interactions for patients. By not managing these experiences, you’re sending a marketing message – and not a good one.

Take control: start small

One of the reasons many practices procrastinate about marketing is that they confuse it with advertising and selling.  They don’t want to invest a lot of time and money in buying services that could be inappropriately “salesy” and cut into existing practice revenues.

The reality is, though, marketing a medical practice isn’t about “selling” so much as communicating what your practice is about, reinforcing your commitment to quality care, and making it easy for patients to find you and interact with you.  And, the good news is, there are many very easy steps your practice can take to do a better job of marketing that require little or no out-of-pocket expense.

First steps: take a look at the patient experience.  How are patients greeted when they arrive at your practice?  Do you have signage with a color scheme and logo that reflect your practice’s personality and mission – and do you use the same branding elements elsewhere, for example on letterhead, nametags and cards?  If your staff members wear scrubs, are they coordinated? 

What about your phone system – are you offering friendly health tips in your automated greeting?  Ditto for your email messages – are you including tips in your email signature?

Most of these things can be done at little or no additional cost to your practice – they just require a little more attention to detail.

Make it easier for patients to find you

We’re always surprised by how few practices take advantage of the wide variety of free ways to be found by prospective patients online.

For example, many practices shy away from physician rating sites like Avvo, Vitals and Healthgrades because they’re uncomfortable with “grades” from patients.  But, regardless of whether you ignore them or embrace them, you’re likely listed on these sites, and prospective patients will see your listing – and the information they find could be incorrect or outdated.  By visiting these sites and claiming your listing, you’ll be able to correct any errors.  Plus, in some cases, you’ll be able to add your website link – a big plus for your Google search ranking.

Insurance directories also sometimes make mistakes – be sure to check that all the plans you accept have you correctly listed, both online and in print.  (Imagine the damage to new patient flow that could be caused if a key carrier incorrectly states you’re not accepting new patients!)

In the last year or two, a service from Google called Google Places has become increasingly important and useful.  A Place record for your practice pulls together existing data online (often from physician rating sites – another reason to claim and monitor your listings there) including your location, practice type, website address, map info and reviews.  These Google Places records often appear near the top of the search results for local practice types.

It’s easy to search for your practice and find and claim your Place record (or start one if none exists).  Once you’ve claimed it, you’ll have the chance to customize it with your own description of your practice and even add your own photos.  This can make a huge difference to the image you present to patients looking for a new practice.

 Compare the two records below from a “San Francisco pediatrician” search.  The first – verified by the practice, but not customized – offers the basics, ensuring they can at least be accurately found.  But, the second example – which the practice customized with photos and a description – is undeniably more inviting, and gives a prospective patient much more incentive to call.

Learn how a simple ad like this one can be easily improved--an important part of your medical practice marketing

Adding some additional information and an image turn this listing into a useful part of your medical practice marketing strategy

For new practices that haven’t yet established websites, an optimized Places page can also provide a little glimpse of your practice’s personality and mission – while not a replacement for a website by any stretch, certainly much better than having no personalized identity online at all.

Recognize your referrers

Another simple, feel-good form of marketing that many practices often overlook (or underdo) is recognizing referring physicians and patients.

Take the time to ask patients how they came to your practice.  Keep thank you notes on hand – customized for your physicians and practice – and send them out immediately to patients and clinicians who refer new patients to you.  It’s amazing how much your referral partners will appreciate being appreciated by you – and it costs almost nothing.

Keeping track of referrers systematically allows you to do a little something extra for the most important referrers occasionally – maybe invite a key physician referrer out to lunch a couple of times a year, for example.  Nothing too expensive – just a bit of personal recognition.  Keep track of email addresses for referrers, too, so you can stay in touch with them and send them tidbits about your practice area – you’ll be simultaneously sharing useful information while also helping fellow clinicians know which patients to refer to you.

Methodically tracking referrals also allows you to learn over time which geographic areas and which referring practice types are not well covered by your practice – so you can refocus attention to areas of unmet opportunity.

The next level

Once you’ve taken control of these areas, you’ll be ready to take on the next level – which for your practice might include more outward promotion like community events and promotions, creating or updating your website, creating patient surveys and using social media like blogs and Facebook.  But, even if you do nothing more than these initial steps, you’ll go a long way towards making it easier for patients to find you and presenting an image that reflects your practice’s mission and philosophy.

Small Business Lessons for Physicians Practices is a four-part series.  Next installment: Financial basics.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at www.capko.com/blog . Laurie has a BA in Economics from Brown University and an MBA from Stanford. Her most recent article for Getting Paid was the first installment in this series, Small Business Lessons for Physician Practices – Part 1 of 4: Human Resources.

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Improving Practice Collections: Setting Payment Standards with Your Patients

Kathy McCoy, MBA November 11th, 2011

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It’s now more true than ever before: Patients don’t like to go to doctors and doctors don’t like to ask patients for payments.  However, without collecting payments, doctors obviously soon would be out of business.

To improve your patient collections as well as patient relations, when a new patient comes to your practice it’s best to present them with a Welcome Packet.  Be sure to include information on what is expected from the patient and what the patient can expect from the practice in this packet.  One of the most important items to include is your payment policy.

Policies will vary from practice to practice but overall, the baseline is pretty much the same.  Most patients know that some form of payment is due on the day of service; how much is what should be explained up front.

Here are some samples of what can/should be communicated to new patients, both verbally and in print:

  • Please have your copayment ready when checking in for your appointment.  Please check your insurance card for the amount that will be collected. Insurance companies will have different amounts due based on their plans.
  • Should the service provided go beyond the amount covered by your insurance, we will need payment paid in full.  However, if this is not feasible, we do offer some payment options:
    • We can work with you to create a payment schedule.  This will be based on the patient’s individual bill and amount they are able to pay.  However, we prefer that all payments be paid in full within a 6-month period. We offer an online payment portal that allows you to pay your bill quickly and easily from home.
    • An alternate payment plan can be arranged with third party companies offering financing that you would need to qualify for.  We are happy to help you with this. We will place a call to the company with you there and help you apply and (hopefully) get you qualified. They offer plans up to 24 months with zero interest, based on your qualifications.

Please remember that asking for money is always an uncomfortable situation.  However, it is a necessity to sustain the practice. Just as they wouldn’t go to the grocery store without expecting to pay, patients shouldn’t expect medical services without paying. Remember the following when asking for payments:

  • Always smile
  • Ask for payments in a calm voice
  • Ask how they would like to pay, not if they are going to pay today
  • If the patient says “I can’t…” respond in a caring manner and explain the alternate payment options.  Know that it is just as difficult for the patient to admit that they are short on funds as it is for the practice to have to ask.
  • Always ask if they have any questions.
  • Never talk down to the patient or make them feel inferior or shameful.
  • Treat the patient as you would want to be treated.

In addition to including the payment policy in the Welcome Packet and verbally informing the patient, it is also a good idea to have either a placard made to hang on the wall near the reception check-in desk or to be placed on the desk.

When payment standards are presented upfront, in full, from the beginning, the patient feels informed and knows what is expected of them.  It’s when this is not communicated clearly that the patient feels defensive and this can lead to a difficult time collecting payments due in the practice.

Want more? Watch a short video by expert Betsy Nicoletti on improving your time of service collections.

What tips would you offer for communicating payment standards to patients? What has worked—or not worked—for your practice? Share your experience in the Comments box.

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Complimentary Webinar: Getting Paid in 2012 – What You Need to Know Now to Make it Happen

Kathy McCoy, MBA November 11th, 2011

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Thursday, Dec. 15, 2011
1:00 PM EDT/10:00 AM PDT
Elizabeth W. Woodcock, MBA, FACMPE, CPC

Learn how to navigate compliance and other medical billing challenges with expert Elizabeth Woodcock

The 2012 reimbursement environment isn’t just about fee schedules. New incentives, new coding rules and more are headed your way – and fast. National speaker, trainer and author Elizabeth Woodcock, MBA, FACMPE, CPC, will give you the practical tips and realistic strategies you can put into play now. After attending this session, you will be able to:

  • Identify the major changes in CPT codes in 2012 and how they will affect your practice
  • List the critical points in Medicare physician reimbursement for 2012
  • Describe the government’s incentive plans – and penalties – for 2012
  • Summarize the trends in private insurance most likely to impact physician reimbursement in 2012

It pays to be proactive, but first you need to know what to expect. Attend this dynamic session to discover the array of new ideas to keep your practice as profitable as possible in the year ahead.

Register now to learn how to protect your revenue flow from CMS changes and more in 2012

You can download the handout for the Getting Paid in 2012 Webinar now.

You can also download an appendix on Medicare 2012 impact by specialty appendix as mentioned by Elizabeth during the webinar.

Question-and-Answer Session — Ask your tough questions and get answers for your 2011 reimbursement challenges.

Who Should Attend
Private practice owners, office managers, billing managers, billers, billing service owners and others concerned about maintaining profitability for medical will benefit from this informative session.

CEU Credit
"Getting Paid in 2012: What You Need to Know Now to Make it Happen " meets the criteria of the Professional Association of Health Care Office Management and is approved for 1 CEU(s).“Getting Paid in 2012: What You Need to Know Now to Make it Happen ” meets the criteria of the Professional Association of Health Care Office Management and is approved for 1 CEU(s).

About Your Speaker:
Elizabeth W. Woodcock, MBA, FACMPE, CPC

Elizabeth Woodcock will share her insights on major changes in CPT codes, critical points in Medicare physician reimbursement, government incentive plans and penalties and more in this informative webinar

Elizabeth Woodcock is a speaker, trainer and author who is passionately dedicated to helping physician practices achieve and sustain patient satisfaction, practice efficiency, and profitability. An expert at practice operations and revenue cycle management, she is nationally recognized for her outstanding presentations and writings aimed at improving the business of medicine. Her education and expertise, combined with her humor and an engaging delivery, make her popular with physicians and administrators alike.

With rich experience in consulting, training, and industry research, Elizabeth has led educational session for the nation’s most prominent health care professional associations, specialty societies, and medical societies. She consults for many clients including Kareo medical billing software.

Register now to learn how to protect your revenue flow from CMS changes and more in 2012



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Insights from AMBA 2011: The Collections Call and How to Improve Your Results

Kathy McCoy, MBA November 10th, 2011

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At the annual AMBA meeting in Las Vegas this past October, Diane Moulzolf, director of operations for Financial Consultants Company Inc., gave a great presentation on how medical billers can maximize collections. A longtime collections professional and collections trainer, Moulzolf offered a multitude of useful tips covering everything from information gathering at the front end to locating hard-to-find debtors. One sub-topic of particular emphasis was the collections call.

Collections calls are an important — if not a favorite — aspect of the medical biller’s job. They also require skill, a sense of purpose and knowledge of what to do, who you’re dealing with, what to avoid and so much more. In short, it’s a critically important task…and a topic worthy of focus on this blog.

The purpose and importance of the collections call

The objective of the collections call is simple: Collect money from the debtor (these days more professionally referred to as “the consumer”) and resolve the account. While it is sometimes greeted as an unwelcome task, the collection call is essential to ensuring the practice can continue caring for its patients.

The philosophy of the collections call

The collections call is, at its essence, a sales job. It is the act of making the bill a priority for the consumer. Like any sales undertaking, this means having a positive attitude and confidence in your skill, professionalism and product. Without these, the consumer — the sales prospect — will sense your lack of commitment… and you “lose the sale.”

  • Product – Be confident that the practice is providing a necessary and important service that has value. Remember that the consumer does owe for that service and has always known of the payment obligation and that it won’t go away. And never lose sight that you are helping them pay it before incurring charges, credit dings, etc. You represent the good guys.
  • Professionalism – Be business-like. Be courteous and respectful but firm, assertive and focused. Never be demeaning or condescending. State your case with conviction, and never lose your cool. Remember that consumers’ frustrations are not aimed at you personally.
  • Skill – Being confident in your phone skills starts with knowing what to do, how to do it, what not to do and why. In her presentation, Moulzolf shared quite of lot those pointers, which follow.

Control is everything

Moulzolf talked about how control of the call is essential to its success. If the consumer takes control, they take the conversation elsewhere. Gaining and maintaining control of the call is how collectors collect. And the control is yours to lose or keep. Whoever places the call starts in control. The start of the call is also where the tone is established, which is also critical to maintaining control.

Tone is essential to maintaining control of the call

In the first 30 seconds of the call, you must establish the right tone. You must lead the conversation with a firm voice that demonstrates your confidence and resolve. Mean what you say… and match it with your tone and demeanor. Don’t make friends or let the consumers get familiar. Don’t try to put them at ease. Your actions and tone should represent that you’re focused, immune to distractions and completely business-like.

Listening is one of your most powerful collections tools

Listen carefully to the consumer’s words and the meaning behind them. Stay alert to the subtleties. Let the consumer give you information you can use. Moulzolf gave an example of someone saying first they have no money but later divulging that they’re going on vacation. Extending the courtesy of listening can provide you valuable information… and help develop a certain amount of rapport that could help gain consumers’ cooperation.

Additional helpful tips for collections calls

Here are just a few of the other helpful hints Diane Moulzolf shared in her presentation:

  •      Know the various personality types and how to handle them. (Look for a future blog posting on this topic in the near future.)
  •      Know how to overcome consumers’ objections. (Look for a coming post on this topic, as well.)
  •      Best times to call are between 8 and 10 in the morning and 5 to 9 in the weekday evenings. Saturday mornings are also good.
  •      Know the rules in your state and the state you’re calling. And be careful. There are lots of rules, and you must comply with them.
  •      Don’t leave details on voicemail. Leave a name and a number and ask for a return call.
  •      Make sure you’re talking to the correct party
  •      Use dead air to your advantage and learn the value of the “psychological pause.” In sales, the first person to break silence generally loses.
  •      Use clear, concise and positive language
  •      Match your volume, energy and rate of speech to that of the consumer.
  •      Use the consumer’s first and last name at first, then use the proper salutation (Mr., Ms., Dr., etc.) followed by the last name for the remainder of the call.
  •      Request the balance in full, then negotiate down from there. If asked, you’re requesting it in full because it is delinquent.
  •      If offering payment arrangements, make them for timely resolution of the account. And get employment information, which would be asked for by any institution offering financing.
  •      If they’re mailing payment, ask for the check number, the bank and the date it will be mailed. 

Look for more from Diane Moulzolf’s AMBA 2011 presentation on maximizing collections, as well as other helpful information from this year’s meeting, coming up on this blog.

To learn more about how a patient payment portal can help you quickly collect payments up front and streamline payments during the collections process, read about Kareo’s new Patient Payment Services.

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Welcome to Getting Paid, a weblog by Kareo offering ideas, news and opinions about medical billing and practice management with the goal of making medical billing easier and yes, getting you paid. Visit the Product Blog for more information on our products.

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